As far as the shrinkage goes, if you take the time to add a little more hand quilting in the blocks, it should help eliminate some of the excessive shrikage in the looser woven muslin. You are doing just fine. You will some day look back on this and just realize as we all do that some things are meant to be lessons learned on the path.
Let us know when that baby is due. Do you know what you are having and is the quilt for the baby?
Hi from Southern California.